Every few months I take a look at recent research studies and surveys on the state of digital transformation. Normally there are a dozen such surveys in 6 months. This time I found over 100 reports. This is a testament to the fact that digital transformation is now a top 5 strategy goal at most companies. So let’s take a look at what the data shows
Every few months I take a look at recent research studies and surveys on the state of digital transformation. Normally there are a dozen such surveys in 6 months. This time I found over 100 reports. This is a testament to the fact that digital transformation is now a top 5 strategy goal at most companies.
So let’s take a look at what the data shows
There is no single digital playbook for the new normal. We talk about this quite a lot on this channel. Each company is finding the best way to use the latest digital tools and make sense of the shifting customer expectations. As I was reading through all the surveys, articles, and studies I was looking for common themes. Common themes that the majority of business leaders believe in. That may become dominant trends. And as the investor adage goes, we should all invest with the trend...
So these are the top 5 themes on digital transformation (as of June 2021).
Theme 1 - Digital Transformation is a top 5 strategic goal
In the Global CFO Survey by Dimensional Research, 80% of CFOs said that digital transformation is a top 5 strategic priority. CFOs commented that most of the increase in technology investment is due to digital transformation. A McKinsey survey found that 65% of the companies increased their digital investment in the last year. The study also showed that leading executive teams take time every week to review the latest digital technologies. Every Week.
There is also a broader push across executive functions to make the leadership teams more tech-savvy and digital savvy. A Deloitte study showed that top-performing companies completely link their strategic and digital plans. An IBM research points out that last year digital was used for cost efficiencies and now the focus on improving customer experience.
Theme 2 - Digital Transformation must create real value
The same CFO survey found that 2/3s of CFOs refuse to waste money on IT investments that don’t move the needle. The majority wants to cut existing IT investments without clear ROI. For the projects that create value, CFOs want them to drive revenue growth and help with process efficiency. The McKinsey survey showed that leading companies decide on a monthly basis which digital programs to invest in and which to shut down. In a BDO survey 89% of respondents said their digital program delivered value, with over 70% found either revenue growth or increased profitability. An IBM survey of manufacturing companies found that almost 90% of them expect massive value from digital in operational efficiencies.
Theme 3 - Digital transformations are accelerating
Almost every survey I read pointed out how years of transformation work got done in months during 2020. Businesses learned to do projects fast and there is no turning back. There is no longer time for 6 months of project scoping and 3 months of RFPs. The McKinsey survey pointed out that what was best in class speed in 2018 is not considered below average. At the current trajectory, digital laggards may fall be- hind by years compared to their peers. I let that reality sink in. The IBM report showed 67% of manufacturers accelerating digital projects. This is significant manufacturing industry used to lag in digital transformation behind consumer, tech, and other sectors. 70-80% of the companies focus on AI, automation, and machine learning.
Theme 4 - Companies Building New Digital Businesses
Another recurring theme in surveys is the need for companies to build digital products and services. The key point is that they go beyond digitizing current processes- es and create entirely new business models based on digital capability. 64% of the ex ecutives in the McKinsey study expect to create new digital businesses in the next 2 years. Several studies found that the top performers plan to over-invest in technology as a competitive differentiator. The BDO report found 59% of companies introducing a digital revenue stream this year. In manufacturing digital innovation saw the expansion of 3D printed products and mass customization.
Theme 5 - Increased investment in digital talent
The research is consistent with the massive increase in digital talent in companies. This is a combination of retraining and recruiting. The McKinsey survey found that those companies that hired digital talent performed better than those that retrained their current workforce. In the IBM manufacturing study, they point out that the biggest barriers to successful digital transformation are lack of talent, training, and adoption. 75% of the companies they surveyed planned employee retraining efforts.
So there you have it. I’m glad to see that the research studies confirm many of the themes we’ve been talking about on this channel. The top 2 for me is this. Double your expectation on how much value digital transformation can create for your business and move faster than you think it is possible. Then you will be alright.
CFO Survey https://dvcr.ws/cfos2021
McKinsey Digital Edge https://dvcr.ws/mckde Deloitte Survey https://dvcr.ws/del21
BDO Survey https://dvcr.ws/bdo21
IBM survey https://dvcr.ws/ibm21